Jobs and Work

Debate between Austin Mitchell and Caroline Dinenage

Wednesday 11th June 2014 Commons Chamber

[Austin Mitchell]

If it is any consolation, Madam Deputy Speaker, my clock stopped in 1979. I hope that that qualifies me for an extension of my speaking time.

This kind of society where wealth accumulates and wages and salaries fall as a share of GDP is very undesirable. As Goldsmith put it,

“wealth accumulates, and men decay”.

And it is an economically inefficient society, because purchasing power and stimulus to the economy, then growth, come from the purchasing power of the masses, not the classes. If we are transferring more money to the classes, we will have a slow-growing, stagnant economy. Under the policy pursued by this Government, the only real long-term plan is to slash public spending, benefits and the living standards of the working classes, to transfer money to tax cuts for the rich. The theory is that this will stimulate enterprise and money will trickle down to the poor and the working class, in the same way that the trickle-down effect of horses improves roads. That is the plan, and it is a disastrous development for our economy.

I agree with the proposed measures on raising the minimum wage, promoting the living wage and improving skills, but other measures need to be taken as well. The only real solution to the problem is economic growth to put the people back to work, because full employment is the only adequate form of social security that we have ever developed in this country. That means, first, a massive house-building programme, particularly one of public housing for rent that people can move into, because most people now cannot afford a mortgage and could not get one if they tried. That could be financed by municipal bonds or quantitative easing. Why should the money from quantitative easing—which is, in effect, the Bank of England printing money—all go into the vaults of the banks? Why should it not be used to finance contracts for massive public spending and investment in work on new towns, for instance, provided that there are proper contracts and a proper rate of return? We should use quantitative easing to improve public spending.

[Caroline Dinenage (Gosport) (Con)]

rose—

[Austin Mitchell]

I am not giving way—I am sorry. I am having my time extended as an incentive to carry on next year.

Secondly, we should expand public spending generally. What is the problem with borrowing? In a recession, we need to borrow to stimulate the economy. Keynesian economics still works. Why are we so reticent about borrowing more to spend, to stimulate growth? Only in a growth situation can we pay back the debt.

Thirdly, we should boost exports by getting the pound down to a more competitive level. It has risen by nearly 10% in the past few months, and it needs to be more competitive if our exports are to be stimulated.

We need to take all those measures to expand the real economy as well as the measures to deal with the labour market that we are discussing. I appeal to the Government to get rid of their restrictive attitude and start thinking about expansion. I ask my Front Benchers to be less cautious and timorous about capital. Let us expand, grow, and get the people back to work.